November 6, 2017 / 11:17 AM / a year ago

Carillion boosted by two contracts with UK's Network Rail

FILE PHOTO: A Carillion sign is seen in Manchester, Britain July 13, 2017. REUTERS/Phil Noble/File Photo

(Reuters) - Carillion (CLLN.L) has won two contracts with state-owned Network Rail which should generate revenue of almost 200 million pounds for the troubled British construction and support services company over the next three years.

Carillion wants to focus on rail and property services as it seeks to stabilise its business and rebuild its balance sheet. Securing a slice of major public works contracts is an important part of this process.

Carillion has signed a contract with Network Rail to upgrade the existing track and infrastructure on the route from London to Corby, north of the capital, it said on Monday.

The contract is expected to produce revenue for the company of 62 million pounds over the next two and a half years.

Carillion Powerlines, its 50/50 joint venture with Powerlines Group, has signed a contract with Network Rail in respect of the midland mainline electrification programme.

Under the contract, Carillion Powerlines will undertake work to complete the electrification of the route from London to Corby. The contract is expected to generate revenue for the JV of about 260 million pounds over the next three years.

The British builder, which has issued two profit warnings this year, has been focusing on its disposals and cost savings programmes to cut debt.

Its shares, down around 80 percent this year, traded 1 percent higher by 1050 GMT, after earlier rising by almost 5 percent.

A consortium including Carillion has also won a 1.4 billion pound contract to help build Britain’s High Speed 2 railway, while another of its joint ventures secured a deal to supply catering and other services to British military sites.

Reporting by Radhika Rukmangadhan in Bengaluru

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